Fitch upgrades Southern Bank, affirms CIMB Bank

Fitch Ratings said it upgraded Malaysia-based Southern Bank Bhd.'s subordinated debt rating to BBB from BBB- and preference shares to BBB- from BB+. The ratings were removed from Rating Watch positive, and the outlook is stable.

Following the upgrade, the ratings were moved to Malaysia-based CIMB Bank Bhd. (formerly Bumiputra-Commerce Bank Bhd.). The agency also affirmed CIMB's long-term foreign-currency issuer default rating at BBB+, short-term foreign-currency rating at F2, individual rating at C and support rating at 2.

Fitch said the upgrade follows the vesting of the entire business undertaking of Southern Bank into the much larger CIMB. Southern Bank's ratings were placed on Rating Watch positive in March 2006 following the announcement that Bumiputra-Commercial Holdings Bhd., which wholly owns CIMB, would be acquiring Southern Bank.

From a strategic point of view, Southern Bank will provide the CIMB group with access to a strong credit card, consumer/small and medium enterprise banking and wealth management business to complement its strength in corporate and investment banking, placing it in a stronger position to compete in the retail business segment, according to the agency.

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